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UK Investors Stop Gambling on Listed Bookies

Brits investing online in ISAs and SIPPs through online stock brokers appear to have lost enthusiasm for listed online gaming and sports betting companies. While the industry is often seen as controversial, it has provided very good returns for investors over the years with UK companies such as William Hill, and Ladbrokes.

However, the government has come to the conclusion that at least some of the significant revenue and profits being generated by bookmakers are the result of the unethical exploitations of customers with gambling problems. Online gambling has not been the target of criticism this time but rather betting terminals found in high street bricks and mortar bookmakers. Their highly addictive nature has led to critics labelling these terminals the ‘crack cocaine’ of gambling addiction and it is suspected they encourage problem gambling behaviour.

Until now the maximum stakes legally permissible on gambling terminals has been £100. However, reports over the weekend suggested that the Government is set to slash this by 98%, bringing the maximum stake right down to £2.

The result has been a plummeting of share prices this morning as investors bail out of the gambling companies expected to be most significantly affected by the mooted regulatory changes. At the time of writing William Hill had dropped 11.78% or 39.4p for the day. A very slight recovery has been recorded over Monday with the share price down 43p on Friday’s closing level as markets opened this morning.

Ladbrokes Coral also saw significant losses and is down 8.11% or 14.5p. The morning similarly started even more desperately for Ladbrokes, which had been down 18.5p on Friday’s close.

Ladbrokes chief executive Jim Mullen moved to reassure investors today with a statement that suggested the bookmaker still has confidence that the end result will be a less serious crackdown. His statement to the markets outlined the fact that the Government’s review is still in progress and that the industry will also have the opportunity to respond to concerns raised:

“The triennial review has been running for over 15 months and throughout that time there has been constant rumour and speculation about potential outcomes, of which this is yet more. It should be noted that the current call for evidence is yet to conclude and industry responses have not yet been submitted to government.”

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